IDEAS home Printed from https://ideas.repec.org/a/ids/ijmore/v19y2021i3p375-386.html
   My bibliography  Save this article

Capital heterogeneity, entrepreneurship and two-way capital flows

Author

Listed:
  • Abdelkader Mohamed Sghaier Derbali
  • Ali Lamouchi

Abstract

This paper examines the drivers of two-way capital flow phenomenon in various developing countries where flows of portfolio investment and direct investment through borders prove contradictory directions. We try to claim that the scarcity of entrepreneurs in fewer developed countries, who improve firm productivity across unobservable (and thus not contractible) entrepreneurship effort, is an essential resource of two-way capital flows. Building upon the context of venture capital studies, this paper describes in a straightforward model that the lack of entrepreneurs would leave some domestic investment opportunities forgone, following in lower investment, lower interest rate, and lower savings compared optimality. Allowing foreign entrepreneurs to raise money from domestic financial market in the form of portfolio investment outflow and then to invest in the domestic firms in the form of direct investment inflow would help alleviate the situation. In this regard, two-way capital flows bring domestic economy benefit of learning through opening-up.

Suggested Citation

  • Abdelkader Mohamed Sghaier Derbali & Ali Lamouchi, 2021. "Capital heterogeneity, entrepreneurship and two-way capital flows," International Journal of Mathematics in Operational Research, Inderscience Enterprises Ltd, vol. 19(3), pages 375-386.
    • Handle: RePEc:ids:ijmore:v:19:y:2021:i:3:p:375-386
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=116962
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Obey Dzomonda & Collins C. Ngwakwe, 2022. "Foreign Direct Investment, Public Sector Venality and Entrepreneurship Development in Developing Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 12(5), pages 71-77, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijmore:v:19:y:2021:i:3:p:375-386. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=320 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.